TCS, Infosys Fourth Quarter Earnings: TCS (Tata Consulting Services) and Infosys, two of India's top software exporters, will kick off their fourth-quarter earnings season this month. It is expected to be a modest quarter for IT companies.
According to a report by ET, TCS will release its fourth quarter results on April 12, while Infosys will announce its on April 18.
General, IT companies They are expected to perform moderately in the March quarter, with no significant surprises expected. Nuvama forecasts industry revenue growth to be between -1.5% and +4.5%, influenced by the gradual return of furloughs and reduced discretionary technology spending.
However, the focus is mainly on guidance for the current fiscal year (FY25), as the weak conclusion to FY24 and an uncertain demand environment may temper initial forecasts for FY25 among most stakeholders.
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TCS and Infosys Q4 Earnings Expectations

Analysts expect TCS to demonstrate industry-leading growth in the March quarter, supported by the BSNL deal. Furthermore, the company's steady FX revenue growth is expected to outperform its peers sequentially during the March quarter.
However, Infosys may start witnessing a recovery in profits from the first quarter of FY25, driven by expectations of significant increases in large deals.
During the fourth quarter, Kotak Equities projected a flat 1.7% quarter-on-quarter revenue growth for TCS, while Infosys may experience a decline of 1.5% on a sequential basis.
The March quarter tends to be seasonally weak for Infosys. The sequential decline is expected due to reduced revenues from third-party software sales and weak discretionary spending.
Regarding margins, TCS is expected to outperform its Bengaluru-based peer, with sequential improvement likely aided by higher employee utilization and pyramid management.
Kotak forecasts a 40 basis point decline in Infosys' EBIT margins due to the impact of salary revisions and lack of growth leverage.
Business wins in the fourth quarter are expected to be about $10 billion for TCS and about $3 billion for Infosys. In the December quarter, Infosys secured large deals worth $3.2 billion, while TCS boasted deals valued at $8.1 billion.
Indian IT companies, including Infosys, that issue annual guidance for revenue growth are likely to adopt a cautious approach in their guidance. This caution is due to ongoing macroeconomic uncertainty and the recent forecast cut by Accenture.
Nomura anticipates that Infosys will guide annual revenue growth of 2-5% in constant currency terms, with an EBIT margin range of 20-22% for fiscal 2025.
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Stock Outlook

The IT sector has experienced significant volatility in recent months, marked by a strong recovery in December and January, followed by a strong correction in March.
CLSA India recently updated its rating on some blue-chip technology stocks and raised price targets for some of them. However, expect most companies to offer a conservative outlook due to the uncertain global environment.
TCS was upgraded from “sell” to “underperform” with the price target increased from Rs 3,925 to Rs 4,043. Meanwhile, the brokerage maintained its “outperform” rating on Infosys but lowered the price target to Rs 1,706 from Rs 1,741.



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